As GameStop (GME) stock price has continued to fluctuate wildly due to various events earlier this year, little concrete response has been offered by the company regarding the situation. Surprisingly, this included the Q4 2020 earnings call as the company has continued to shift executives and leadership around. Even so, the company teased the possibility of offering additional stock to take advantage of the situation and fund its ongoing growth and transformation. That tease is apparently come to fruition as GameStop announced it will be selling up to 3.5 million additional shares of common stock – a move which saw the share price drop nearly 10% ahead of market opening.
GameStop officially announced its plans for the upcoming at-the-market equity program via an investor relations press release on April 5, 2021. Reportedly, GameStop has filed a prospectus supplement with the US Securities and Exchange Commission (SEC) for which the company may sell a maximum of 3.5 million shares of its common stock by way of an at-the-market equity offering program.
The main purpose of this supposed “time to time” offering will be to aid the company in its ongoing transformation, as well as for general corporate purposes. GameStop previously signaled the possibility of this secondary stock offering in a small note in its recent Q4 2020 earnings report. Although the volatile state of GameStop’s stock went entirely unaddressed in the company’s conference call relating to its fiscal year finish, the above tease was the sole address in regards to the stock situation. Meanwhile, GameStop has had several shifts in leadership including the appointment of a new Chief Growth Officer and the upcoming exit of several directors including Reggie Fils-Aime from the Board of Directors.
Nonetheless, today’s announcement saw the GameStop stock take a small dip of around 9.7% ahead of market opening. It will remain to be seen when the supposed additional shares of GameStop common stock hit the market. As we continue to watch the situation with GME, stay tuned for further updates, developments, and information as it becomes available.